Recent Posts

Unlike MA’s robust public company ecosystem, where I counted 33
companies with greater than $1 billion in market capitalization,
I was shocked to discover how very few public companies in the
Innovation Economy that exist in the Big Apple. If you
restrict the geography to 30-45 minutes driving distance and part
of the “scene” (which encourages mingling and productive talent
and idea sharing), you have to eliminate CA, IBM and
Priceline. I think that only leaves you with the following
companies that have greater than $1 billion in market
capitalization:

AOL ($2B)

Intralinks ($1B)

TakeTwo Interactive ($1B)

I’m sure I must be missing a few, but my informal survey of NY
VCs, bankers and entrepreneurs didn’t yield any others.
There are a few smaller public companies, like Travelzoo
($660M) and Medidata ($470M), but even the sub-$1 billion market
cap list is uninspiring. Given the digital transformation of
media and advertising, some may argue that the big media
companies and advertising agencies should be included here and
certainly they play a very important part of the NY ecosystem,
but in terms of pure technology companies with entrepreneurial
DNA and technology roots, it’s disappointing to see how few are
in NY.

That said, when you analyze the pipeline of IPO candidates, you
begin to see a very different picture. Not only is it quite
robust – there are roughly 30 companies with estimated market
values of greater than $100 million – but arguably full of
companies that feel more promising and explosive than the MA
companies. The chart below is lifted from the Business
Insider list, but I also cross-checked with AlwaysOn, Inc’s
various lists and input from local members of the entrepreneurial
community.

Rank

Company

Estimated Market Value (mn)

Estimated 2010 Revenue

1

TheLadders.com

$800

$100-120

2

Gilt Groupe

$750

$400-500

3

Everyday Health

$480

$120

4

FreshDirect

$300

$300

5

Etsy

$300

$30-50

6

Vibrant Media

$275

$125-150

7

Thumbplay

$260

$80-100

8

Yodle

$250

$70

9

SecondMarket

$250

$50

10

ideeli

$250

$150-175

11

Huffington Post

$200

$30

12

Tremor Media

$175

$60-70

13

Undertone Networks

$150

$65

14

Gawker Media

$150

$50

15

CafeMom

$150

$25-30

16

NextJump

$135

$20-30

17

Betaworks

$100

$0-5

18

Rent The Runway

$100

$20

19

Recycle Bank

$100

$10

20

Media6Degrees

$100

$20-22

21

Foursquare

$100

$0

As far as I know, none of these companies has yet registered to
go public. Everyday Health almost did, but then pulled out
and raised a private round of financing instead. Behind
this list, there are tens of other strong NY-based start-ups with
real revenue momentum (> $30m) and belong in the > $100
million market capitalization category. Folks cite:

33Across

Antenna Software

BuddyMedia

Clickable

Etsy

GLG

LiquidNet

MediaMath

OLX

Vostu

Yext

The conclusion is that NY is missing, that robust public
company ecosystem does not exist. Unlike in MA, one doesn't
see public company CEOs regularly mingling with their pre-IPO
brethren at cocktail parties and industry gatherings. If
you fast forward two or three years, however, the NY-based IPO
company pipeline appears quite promising – arguably more
promising than MA’s – and bodes well if the investors and
management teams have the courage to go all the way. Then,
the CEOs of these companies will need to heed the warning of many
wise men and women before them who know that an IPO is not an
exit, it’s a financing event. The best is yet to come.